The implication doesn’t stop there. According to Imran Lakha, founder of Options Insights, dealers hold “net long gamma exposure” in excess of $70,000. This means that traders, who strive to maintain neutral exposure to the market while making money through the bid-ask spread, would sell short or above 70,000 to remain neutral or covered.
“This hedging acts as a brake, limiting the speed at which BTC can operate once it hits this level,” Lakha said, adding that ether (ETH) is not as exposed to dealer gamma dynamics and can rip much faster.
Bitcoin recently changed hands near $64,100, down almost 1% since midnight UTC. Other major cryptocurrencies, including Ether, XRP (XRP) and Solana (SOL), suffered similar losses, while Nasdaq 100 Index futures fell 0.5%.
“As always, there is a risk of sudden liquidation in the event of shocks in the financial markets, which could cause BTC or global stock indices to fall, but waiting for such moments is a thankless task,” said Alex Kuptsikevich, chief market analyst at FxPro. “Under such conditions, buying in a calm market at less than half of peak levels seems to be a completely reasonable tactic for the coming days or weeks.”
Stay vigilant!
Read more: For analysis of current altcoin and derivatives activity, see Crypto Markets Today. For a full list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
